The alarm issued by the US Federal Reserve on Wednesday led to the price of the Brent -the benchmark oil in the Old Continent- to its second worst day of the year.
The fall on Tuesday reached close to 4%, a setback that oil has not experienced since the beginning of 2023, when on January 4 it dropped more than 5% of its value and marked a low for the year at $77.84 a barrel. In the day of this Wednesday, the losses were prolonged and reached a 1.5% decline. However, halfway through the session, the message from Jerome Powell, president of the Fed, which indicated that the body saw rates at 5.5%, tempered the fall that finally stood at around 0.5%.
In just two sessions, the barrel plummeted close to 4%, its price falling to 82.38 dollars with data at the close of the European session, its lowest level so far in March. “The first drop in US crude inventories this year failed to dispel the pessimism that the Federal Reserve’s persistently aggressive tone has cast on the market,” they explained from Bloomberg.
SaxoBank’s head of commodities added that “the most inverted US yield curve in decades now signals an even greater risk of recession and, with it, weakening demand for fuel.”
“Many major banks expect prices to change, helped by rising demand in China and an upcoming seasonal change that may reduce inventories,” Brian Kessens, a portfolio manager at Tortoise Capital Advisors, said in statements from the financial information portal.
Since the beginning of 2023, the price of oil has already left just over 4% of its value, compared to the 2.6% that came to rise after setting highs for the year at $88.19 a barrel.
The ‘West Texas’ also yields
The benchmark oil price in the US suffered even greater losses than the European one. On Tuesday it plummeted more than 4% to extend its fall by an additional 1% on Wednesday, standing at $76.40 a barrel.